How To Add Cryptocurrency to Your Investment Portfolio
Investor opinions surrounding cryptocurrency have shifted over recent years, especially considering major commercial players are now accepting Bitcoin as a payment option. Another reason why investors no longer see cryptocurrency as silly internet money is that the technology behind crypto is more widely understood; blockchain is shaping the future of the internet. With this in mind, there’s no denying the value behind adding high-risk crypto investments to your portfolio – but how?
Current Crypto Landscape
Before jumping in blind and making high-risk investments, it’s important to understand the current cryptocurrency landscape. More people are investing in crypto than ever before, as shown by the University of Chicago, which found that 1 in 10 Americans invested in cryptocurrency in 2021. Crypto trust has always been a barrier for investors, but commerce and financial institution adoption is helping to alleviate this.
At the moment, there are many things taking place to influence the crypto world including inflation rising and Fed balance sheets increasing. Further, the gold market has been stagnant for some time, with many people shifting their gold assets into crypto. If these trends move forward, previous demand in the gold market will pivot into demand for crypto, which will see the market explode.
If you look into the tech industry, you’ll find that many professionals are leaving generic fields in favor of crypto. Unfortunately, this transition has left traditional tech firms struggling to retain talent. The reason for this change is the foresight to understand that cryptocurrency is here to stay and will likely sit at the center of the internet finance industry.
Getting Started with Crypto
When you’re adding crypto to your portfolio, it’s important to understand the risk and remember that it’s decentralized, meaning there’s no regulation. Unfortunately, this means you’re alone if you lose crypto assets or get drawn into a scam. The best way to secure your assets is to use a reputable wallet like DeFi wallet and learn how to keep your private keys safe.
As well as considering the risk, you need to understand that different coins have varying levels of volatility. Before you release any fiat money, take time to research the cryptocurrency to find out its origins. After all, Dogecoin was invented as a meme by Jackson Palmer and Billy Markus and was heavily endorsed by new Twitter owner Elon Musk – take from that what you will.
Long-Term Crypto Investing
Cryptocurrencies are extremely volatile, meaning that long-term goals are often the most viable. When the market crashes, many investors withdraw and lose out on the high reward. The best thing to do is stick with the coin and wait until the value increases again. Even with a long-term strategy, there’s no guarantee, which is why we recommend holding only 5% of your entire portfolio in crypto assets.
Cryptocurrency is here to stay, meaning it’s a worthwhile investment to add to your portfolio. To get started, you will need a crypto wallet, an exchange, a robust personality, and a solid strategy.